1. Essential Skill: Explicitly assess information and draw conclusions.
PPC and Circular Flow
Essential Skill: Explicitly assess information and draw conclusions.

2. Take out PPF Packet
Pick a partner and review your answers in minutes
Use this time to discuss the questions you did not understand and start to gather specific questions

3. Fish and Fruit PPC
Fish 12 10 8 6 4 2
Fruit 5 10 15 20 30 25

4. Combinations 9 fish and 13 fruit 10 fish and 13 fruit
Attainable
Unattainable
Attainable

5. Maximum Efficiency 11 fish and 0 fruit Efficient 10 fish and 7 fruit
NOT Efficient

6. Movies and Books PPC
Movies
What is the opportunity cost to moving from point A to point B?
What is the opportunity cost of moving from point C to point B?
What does point Z represent?
1000
800 A
600 B
400 C
200 Z D
200
400
600
800
1000
Books (per month)

7. Production Possibilities Curve: Capital Goods and Consumer Goods
Suppose a new government comes into power and forbids the use of automated machinery and modern production techniques in all industries. Which curve in the diagram would represent the new production possibilities curve?
Suppose massive new sources of oil and coal are found within the economy, and there are major technological innovations in both industries. Which curve in the diagram would represent the new production possibilities curve?
Suppose there is a major technological breakthrough in the consumer-goods industry, and the new technology is widely adopted. Which curve in the diagram would represent the new production possibilities curve? c

8. Shifts along the Curve
What would cause the production possibilities curve to shift from the original curve (XX’) to the new curve (YY’)?
Why might a government implement policy to move the economy from Point B to Point A?

9. Baseball Village
Shows the maximum amount of bats and peanuts Baseball Village can produce when using their resources efficiently
Under the curve
Outside of the curve
On the curve
Larger curve
Showing an expanse in the use of resources; something that will allow you to produce more of 1, or both, desired goods
Technology is Improved
More Resources (CELL)
Economic institutions get better at fulfilling our wants

10. Cookies, iPhones, and iPads

11. 4 Assumptions of the Model
Full Employment
Fixed Resources
Fixed Technology
Two Goods

12. Constant v. Increasing OPP Cost
Model-Not What is Common in the Real World

13. Increasing Opportunity Cost

14. Shifts in the Production Possibility Curve
Neutral Technological Change
Butter C D A B
Guns

15. Shifts in the Production Possibility Curve
Biased Technological Change
Butter C B A
Guns

16. Review
1) Which of the following would not shift an economy's PPC?       a) An increase in population.       b) Doubling the amount of capital in the economy.       c) An increase in the money supply.        d) A technological advance.
2) Efficiency along the PPC implies,       a) Goods are produced quickly.       b) The state of technology is maximized.       c) In order to get more of a good, some of another must be given up.        d) Goods are distributed equitably.

17. Review
3) A PPC shows,       a) The best combination of goods to produce.       b) The plans for increasing output in the short run.       c) What can be produced with various combinations of resources.        d) Resources are constrained by choices.
4) An economy has a constant cost PPC. What do you know about the slope?       a) A straight line.       b) Bowed in.       c) Bowed out.       d) Convex to origin.

18. Review
5) What determines the opportunity cost along a PPC?       a) The kinds of goods being produced.       b) The slope of the PPC.        c) Choices made by the economy.       d) The area under the PPC ) Which of the following are assumptions underlying the PPC?       a) Only two goods are produced.        b) Technology, population, and capital are variable.       c) Prices determine the position on the PPC.       d) All the above.
7) What statement below implies that a PPC will be an increasing cost curve?       a) Resources are scarce.       b) Most resources are more productive in certain uses than others.        c) Underemployment of productive resources.       d) Diminishing marginal returns to scale.

19. Circular Flow Diagram
Create a circular flow diagram using the terms listed on the sheet
Include the * items as the four main players in the economy.
Start by drawing pictures that symbolize the * items, and then label them.
Connect the main players to one another with arrows going both directions.
Use all the other items listed below to label those arrows that connect the main players to one another.

20. Resources Factor Market Taxes Households Firm Gov’t Taxes
Household Income
Factor Payment
Resources
Factor Market
Capital, Entrepreneurship, Land, Labor
Taxes
Purchase of goods/services
Household income, interest
Households
Firm
Taxes
Gov’t
Product Market
Goods and Services
Goods and Services
Purchases
Revenue

22. where in the circular flow does the transaction take place?
factor market
product market

23. Christian buys a new Blu-Ray player at a local store.

24. Alexandra earns $8 per hour working a summer job at the spring factory.

25. Evan earns $25,000 in revenue from his ownership in a bike shop.

26. Ariana makes Christmas ornaments to sell at a local flea market.

27. JessicaCorp builds a new factory and hires 1,500 new workers.